Grail Point August 27th | CICC's research report pointed out that Sinopec's net income in the first half of this year increased by 3% year-on-year, 4% higher than the bank's forecast, mainly due to higher-than-expected profits from joint ventures and associates. As for the refining and chemical sector, profits were actually lower than the bank's expectations. Looking ahead, the recent drop in oil prices may exert short-term pressure on the profitability of the refining and marketing sectors, and the bank expects Sinopec's second-half profits to decline by 20% compared to the first half. In addition, CICC has raised its profit forecast for Sinopec for the fiscal years 2024 to 2026 by 4% to 11%. It is noted that the company's proposed minimum dividend payout ratio for the fiscal years 2024 to 2026 is 65%, providing good downside protection. Therefore, the bank has raised Sinopec's H-shares target price to 6.21 Hong Kong dollars, reiterating a “buy” rating.